Canada has placed a ban on foreigners buying property. The ban which took effect on Sunday aims to make homes available to Canadians facing a housing crunch.
It is not a blanket ban and allows certain individuals such as refugees and permanent residents who are not citizens to purchase the property. Furthermore, it only applies to city dwellings and not to recreational properties like summer cottages etc.
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As per AFP, the measure is temporary and will be in place for two years. About a year back when soaring housing prices were putting house ownership beyond the reach of many Canadians, Prime Minister Justin Trudeau had proposed this measure as part of his 2021 electoral campaign.
Following a win, Trudeau’s Liberal party introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” said the Party at the time.
As per the party, this “desirability” was behind the “real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”
However, as per the Canadian Real Estate Association, the average home price last month fell to Can $630,000 (US $465,000) last month from more than Can $800,000 (US $590,000) at the start of 2022.
Foreign buyers according to the national statistical agency account for less than five per cent of homeowners in Canada. Hence many experts as per AFP have said that a ban on them would not make housing more affordable, rather they say more housing construction is needed to meet the demand.
As per a June estimate by the Canada Mortgage and Housing Corporation about 19 million housing units will be needed by 2030. This means that the construction of 5.8 million new homes is needed.
(With inputs from agencies)
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